THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, CNN ANCHOR: Thanks, guys, very much.

Happening now: the first live pictures of that massive oil spill underwater at its source. But members of Congress still don't think B.P. is coming clean about the disaster. Questions about a cover-up one month later. Stand by.

Republican Senate candidate, Rand Paul, under fire right now for his remarks about the Civil Rights Act. I'll press the tea party- backed candidate about his stand on some tough issues. His opponent is claiming his views are, quote, "dangerous."

And they've had their emotional reunion with their children in Iran. Now, will those -- will the mothers of those jailed American hikers be able to bring their kids home?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

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BLITZER: Dramatic images, never-before-seen pictures of the fiery rig explosion in the Gulf of Mexico exactly one month ago. And we can now see for ourselves in real time the huge amount of oil that's still gushing into the water. But even as B.P. released this live video feed today, the Obama administration ordered the company to release any and all information about the spill. Some top Democrats in Congress say they still don't think B.P. is telling all.

(BEGIN VIDEO CLIPS)

REP. ED MARKEY (D), MASSACHUSETTS: I think now we're beginning to understand that we cannot trust B.P. People do not trust the experts any longer. B.P. has lost all credibility. Now, the decisions will have to be made by others, because it's clear that they have been hiding the actual consequences of this spill.

SEN. BARBARA BOXER (D), CALIFORNIA: The truth needs to be told, and many scientists told both of us privately that from the little they did see of the film, that they didn't think the truth was being told about the amount of oil that's getting out here. At some point, we need to stop all this cover-up.

(END VIDEO CLIPS)

BLITZER: B.P. acknowledged today that there's more oil spewing from the leaky well than the 5,000 barrels a day it had earlier estimated. By CNN's calculations, the spill has now grown to almost 14,000 square miles, that's about the size of the state of Maryland.

Let's go to CNN's David Mattingly right now. He's covering the spill in New Orleans, where folks are getting increasingly nervous.

David, what do we know today?

DAVID MATTINGLY, CNN CORRESPONDENT: Wolf, to say that people here today are losing their patience would be an understatement. They say they need more help to fight this oil coming ashore and they need it now.

Governor Bobby Jindal being very aggressive and calling on the federal government to give them approval and to make B.P. pay for this elaborate plan they have to build a barrier island across the coast here to stop the oil from coming in, because, he says, the booms and the dispersants are not working and are not as effective as they need to be. Part of the big reason was Louisiana has been seeing this oil coming ashore. They're now seeing this thick, thick crude coming ashore in the wetlands. We saw this yesterday -- just thick, chocolate syrupy stuff on top of the water, going into the environmentally sensitive marshes.

He says this is an example of why they need more help and they need it now -- Wolf.

BLITZER: They're going to try one last-ditch effort to stop it by Sunday. Is that the top hat we've heard so much about or what?

MATTINGLY: That's called the "top kill." They've had so many different terms, but the plan is here, this next maneuver that they hope to put into play on Sunday, possibly, is to finish this well off, to stop the flow of oil into the Gulf. It's been taking a long time for them to come up with this plan and to implement it. A lot of patience has been wearing thin in the meantime, now that we are 30 days since this disaster began.

And people want to know -- is this going to work, is this something that we're going to have to live with for a long time, and is this disaster going to continue to grow if it doesn't work -- Wolf.

BLITZER: The stakes clearly are enormous. We'll see what happens with "top kill" on Sunday.

Lisa Jackson, by the way, the administrator of the Environmental Protection Agency, she'll be here in THE SITUATION ROOM later this hour. We'll talk to her about what's going on.

Now, another triple-digit nosedive in stock prices. The Dow Jones Industrials were down 376 points at the closing bell, just a little while ago.

Lisa Sylvester's working this story for us.

Why did this happen today, Lisa? LISA SYLVESTER, CNN CORRRESPONDENT: Yes, what a day it's been, Wolf. You know, first of all, it starts with a jobs report that we had, and one of the key things is there, that weekly unemployment claims were down 471,000 points.

There's a lot of concern that even underlying all of this, a bigger concern, is what's been going on with Europe. And that is the debt crisis. It starts with Greece. There's a lot of concern, Wolf, that this could eventually spread to countries like Portugal and Spain. And all of this -- it's making investors extremely nervous, and they're worried that this will stall the global recovery.

And just to give you a point, the Dow Jones was actually down more than 900 points actually in just the three weeks of the month of May.

BLITZER: So, what we're seeing is people pulling their money out of stocks and equities, and moving to it safer environments right now.

SYLVESTER: Exactly. You're talking thinks like gold. You're talking things like bonds. Investors are saying, look, I don't know which way the European debt crisis is going to go. You know, European countries, they pledged $1 trillion along with the IMF. That is a huge number.

But there is concern that even that may not be enough, Wolf. And so, what they're talking about now is possibly doing the next step which would be taking a look at rescheduling possibly Greece's debt. That means, though, that the creditors, the European banks, would likely have to take a hit -- and that is extremely unpopular, Wolf.

BLITZER: All right, Lisa, we'll stay on top of this story for our viewers as well.

The president of Mexico facing members of the U.S. Congress today and confronting two major problems shared by both countries. Felipe Calderon told lawmakers America should bring back a ban on assault weapons to help ease drug violence along the southern border, and he blasted Arizona's controversial new immigration law just as he did during talks with President Obama yesterday. Mr. Calderon calls the Arizona crackdown an endorsement of racial profiling.

Let's get some more on what President Calderon is saying today and whether he can actually sell to it lawmakers. Our senior congressional correspondent, Dana Bash, has had a chance to speak to some of those lawmakers.

What's the reaction up there, Dana?

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: Well, several Republicans are lashing out at President Calderon about what he said asking Congress to restore the assault weapons ban and those comments about the Arizona immigration law. The Arizona senior senator, John McCain, did not attend President Calderon's speech to a joint session of Congress here, but his good friend Lindsey Graham did. And I caught up with him to get reaction to Mr. Calderon's speech and I also talked to a Democrat who has been out front on immigration.

(BEGIN VIDEOTAPE)

PRESIDENT FELIPE CALDERON, MEXICO: That it's a law not only ignores a reality that cannot be erased by decree, but also introduced a terrible idea using racial profiling as the basis for law enforcement.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Lecturing us on the Arizona law is probably not very helpful.

BASH: Why not?

GRAHAM: People in Arizona are under siege. The right way to fix immigration is at the federal level, and the reason Arizona law comes about is because we've failed as a government at the federal level.

BASH: President Calderon specifically said --

CALDERON: I'm convinced that the comprehensive immigration reform is also crucial to securing our common border.

GRAHAM: That's right. But he doesn't understand the votes. If you had a bill today, brought to the floor of the Senate, at least a dozen Democrats would vote against a pathway to citizenship for the 12 million illegal immigrants.

BASH: So, we just saw the president of Mexico leave. He is asking you in Congress, please, push immigration reform, comprehensive immigration reform. I just talked to a Republican senator, Lindsey Graham, who said, look, the trouble is, Democrats don't want to do this.

REP. LUIS GUTIERREZ (D), ILLINOIS: Do you know what? Comprehensive immigration reform cannot pass without Republican support. I cannot in good conscience go to my Democratic leadership and say, you must have a vote on comprehensive immigration reform if I know very well that the votes do not exist.

BASH: President Obama, when he was with President Calderon, said that he thinks that it can pass. He said the issue is you and your fellow Republicans. That you've been on this bill and that you're not interested in moving forward right now.

GRAHAM: I think it's garbage that they're -- the only problem is Republicans. I just think that's political spin. You know, I'm trying to help President Obama where I can, but he's failed miserably on immigration reform.

BASH (voice-over): On that Democrat Luis Gutierrez agrees.

GUTIERREZ: I really believe he doesn't see it as a necessary priority in his administration. He started his presidency by ignoring the issue of immigration.

BASH (on camera): You think he's had a yo-yo message? GUTIERREZ: Being a child of the '60s, I remember when my yo-yo would not stick, and his doesn't.

(END VIDEOTAPE)

BASH: There you have some pretty colorful language and bipartisan outrage at the president for not being there enough and not being out front enough and focused enough on this question of immigration reform. But the reality, Wolf, here on the Hill is that there are plenty of the president's fellow Democrats in the Senate and in the House who are facing voters in just six months who say that they don't want to deal with this issue.

I talked to several in the House today, who are facing tough re- elections, and they said, look, their constituents don't want Congress to deal with this issue specifically, anything that would give illegal immigrants a path to citizenship. And that is a big reason why Congress is not touching it, and despite what the president of Mexico asked today, that's the reality here on Capitol Hill.

BLITZER: All right, Dana, thanks very much. Dana's watching the story up on Capitol Hill.

The Republican Senate candidate, Rand Paul, is defending his position on civil rights and accusing the liberal news media of reading his remarks wrong. I'll try to pin him down on some big issues, and whether he agrees with the libertarian views of his dad, Congressman Ron Paul of Texas.

President Obama's celebrating a breakthrough on the financial reform bill. We're standing by for a make-or-break final vote in the Senate.

And the video of Pakistani officials don't want their people to see. You're going to find out why the country is blocking access to YouTube.

Stay with us here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Check in with Jack Cafferty for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Mexican president, Felipe Calderon, has a lot of nerve coming into this country and complaining about Arizona's immigration law when all the state wants to do is protect itself against a flood of illegal immigrants from Calderon's country. Instead, Calderon and President Obama are whining about the Arizona law. Calderon, who also took the message to a joint meeting of Congress, is calling Arizona's law discriminatory.

As for President Obama, he says he wants a federal fix to the immigration crisis in this country, which would have to come from the same federal government that has refused for decades to enforce laws already on the books. It is patently absurd. President Obama complains about Arizona trying to do something about a problem that he, President Obama, and the federal government, have created and choose to ignore.

And with all the criticism of Arizona coming from Presidents Obama and Calderon, the Justice Department, the Homeland Security Department, our federal officials, like Attorney General Eric Holder, Department of Homeland Security Secretary, Janet Napolitano, can't even be bothered to read the law that they're criticizing. If they did we, they'd find out that parts of Arizona's law are word for word the same, exactly, as federal statutes on immigration.

But the only thing that matters to the administration is pandering to Hispanics to get ahead of the midterm elections in November.

Felipe Calderon should spend his time trying to create opportunities for his own citizens so they're not driven by poverty and desperation to sneak into this country illegally.

This country doesn't meddle into Mexico's internal affairs, President Calderon, and you ought to keep out of ours. Frankly, our border security is none of your business.

Here's the question: Does Mexico have a right to complain about Arizona's immigration law?

Go to CNN.com/CaffertyFile. Post a comment on my blog.

They gave him a standing ovation in the House today.

BLITZER: Yes. All right.

CAFFERTY: Disgusting -- just disgusting.

BLITZER: Jack Cafferty, stand by.

We're working on some major stories right now. We're going to bring them to our viewers. Jack Cafferty will be back with "The Cafferty File."

A rash of violence in Arkansas leaving two police officers dead, and another two wounded. We'll get the very latest on what happened. We'll be right back.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

BLITZER: CNN has now confirmed that Dennis Blair, the head of the government's -- the head of the government's National Intelligence Service, the director of national intelligence, is resigning. This is a surprising development. Few of us, if any of us, saw this coming.

He's a retired U.S. Navy admiral, has been serving since the Obama administration took office as the top intelligence official in the Obama administration, the director of national intelligence, oversees all of the intelligence agencies, the National Security Agency, the CIA, and everything else.

Dennis Blair, the retired U.S. Navy admiral, he was once commander-in-chief of U.S. forces in the Pacific, is stepping down. We don't know why. We're working this story. We'll get information for you, but this is clearly a bombshell. Something that has happened to force Dennis Blair to step down. Stand by.

Once again, Dennis Blair, the nation's third director of national intelligence, is stepping down. We'll get information for you in a few moments.

In the meantime, let's check in with Lisa Sylvester. She's monitoring some of the other top stories in THE SITUATION ROOM right now.

What else is going on, Lisa?

SYLVESTER: Hi, Wolf.

Well, two Arkansas police officers are dead and another two wounded after separate shootings allegedly by the same suspects. The first shooting occurred at a traffic stop. Later, officers exchanged gunfire with the occupants of a van believed to be involved in the previous incident. The son of the West Memphis police chief is one of those killed. The two suspects have also died.

And Arizona is firing back at the Los Angeles City Council's decision to boycott its controversial new immigration law. In a letter, the state's corporation commission is offering to pull the plug on L.A.'s power supply. Arizona as it turns out supplies 25 percent of the city's electricity. Controversial law requires authorities to question anyone they suspect is in the country illegally. That law is scheduled to take effect in July.

A Malawi gay couple is facing 14 years in prison for taking part in an engagement ceremony. The two men were arrested and found guilty of gross indecency and unnatural acts. Homosexuality is illegal in that country. Government officials say they're upholding the law. Activists, though, contend a constitutional measure which outlaws discrimination is being violated.

And Pakistan is cracking down on the use of some popular Internet Web sites one day after shutting down the social networking engine Facebook. The country is now blocking the use of YouTube. Authorities say the sites are being banned for what they call sacrilegious contents, some of which could depict the Prophet Muhammad, which is considered offensive -- Wolf.

BLITZER: We're going to speak about that with former president of Pakistan, Pervez Musharraf. He's here in THE SITUATION ROOM in our next hour. We've got a lot of questions for him, the former president, Pervez Musharraf.

We're also watching the breaking news right now. We have confirmed here at CNN that Admiral Dennis Blair, the director of national intelligence, has resigned. We don't know why. We're working our sources right now. This is a bombshell development coming seemingly out of nowhere. We have a lot more on this story coming up.

The top intelligence officer, top intelligence official, in the Obama administration, is stepping down. Stand by. We'll get more for you on that.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

BLITZER: The head of the National Intelligence Agency, the director of national intelligence, Admiral Dennis Blair, suddenly, unexpectedly, is stepping down. We have now confirmed that at CNN.

FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: Well, Wolf, I've spoken to now two senior intelligence community officials who confirm to me that Blair is resigning. There had been talk about this. They were planning for it. They believed it was going to be in about a month from now.

And, in fact, one of the names to replace Denny Blair is John Hamre, the former deputy secretary of defense in the Clinton administration. I understand from these sources that Hamre's already been reached out to by the administration.

Why now? Why all of a sudden? Well, there's been ongoing tension and conflict between Admiral Blair, the DNI, the director of national intelligence, and Leon Panetta, the director of the CIA. I don't think that's what explains the timing, however.

Remember, Director Panetta and national security adviser, Jim Jones, just returned from a trip to Pakistan carrying a very strong message on behalf of President Obama. And I'm told what accelerated this was Admiral Blair really had -- it was the last straw when he was not part of that delegation, sent to deliver that tough message, and instead his subordinate, in his mind, Director Panetta, was sent.

BLITZER: So, are you hearing, Jeanne, that he was fired, that he was forced out, or that he volunteered, he'd decided he wanted to resign?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: I'm not hearing anything definitively along those lines. But it doesn't come as a surprise, I don't think, both because of the events that Fran references, but also the spate of incidents we've had in the past year. There's been a lot written about Abdulmutallab, the man that tried to bring down the airplane on Christmas Day, and the report just out this week from the Senate Intelligence Committee was very critical of the NCTC which is part of his domain. He is the orchestra leader. He is supposed to pull together these 16 different intelligence agencies and he's admitted it's still not working perfectly. And so, who has to answer for that ultimately? I guess he does.

BLITZER: So, he decided presumably that -- we don't know for sure -- that enough is enough.

Gloria Borger is here as well.

What are you hearing, Gloria?

GLORIA BORGER, CNN SR. POLITICAL ANALYST: Well, you know, it's no surprise to those of us standing around this table that there has been some political tension with DNI, Director Blair, and the White House, and also between Blair and CIA Director Leon Panetta.

You'll remember -- or those of us who pay attention to these things -- remember that there was an argument between them over who chooses the station chiefs around the world and the White House sided with the CIA on that. And Blair lost out on that argument.

And also, don't forget, that Blair testified, I believe it was before homeland security, about whether he had been consulted on the decision about whether to Mirandize Abdulmutallab, and he put his hand up and he said, no, he had not been consulted. And I was told by a source that, in fact, he had -- and you may know about this -- that he had been chastised for his honesty by people in the administration.

BLITZER: Why was he chastised him for being honest?

BORGER: Because they believe -- well, they did not believe he was honest, that was maybe a poor choice of words. They chastised him because they believed that he had, in fact, been consulted and there was a different interpretation to that. You're shaking your head.

BLITZER: We're talking about the Christmas Day bomber in Detroit.

BORGER: That's right. And remember, there was the testimony about whether they had been consulted and he said, no, in fact, he had not been consulted. And I think there was a difference of opinion on that with some folks very high up in the administration.

BLITZER: It wouldn't be the first time there's tension between the director of national intelligence and the director of the CIA.

TOWNSEND: No. In fact, you'd be hard pressed to name two people in each position that didn't have some amount of tension. It's natural, Wolf. The DNI has only one direct report of the 16 agencies Jeanne refers to and that's the CIA. And so, there's always some tension between the CIA. It's just fears of authority.

This was a little more pronounced and a little more public than I think the administration, the White House really wanted. Director Blair has had an illustrious military career. He's very highly regarded, but this has been a difficult assignment for him. He doesn't have any operational authority. He doesn't have the close relationship with Chief of Staff Rahm Emanuel that Leon Panetta does -- Leon Panetta and Rahm Emanuel having worked together in the Clinton administration. And so, I think it was difficult assignment for him and I think, frankly, he's just had enough.

BLITZER: All right, we're going to go -- go ahead, Jeanne.

MESERVE: Just another point, that he's the third DNI. It's been only five years. They're going to be going on their fourth DNI, who was --

BLITZER: Not in this administration.

MESERVE: No, but since the office was created after 9/11. And so, the question is: how functional can it be, how well can it be doing if you're going through directors at that pace?

BLITZER: Yes. And I think that Senate Intelligence Committee report that came out the other day, Dianne Feinstein, the chair of the -- in which she blasted all the mistakes. They were supposed to be able to connect the dots. They weren't. That's National Counterterrorism Center that they were supposed to connect the dots. They didn't connect the dots. So, it was pretty humiliating and pretty embarrassing and maybe was a fact in Admiral Dennis Blair's decision to step down.

All right, guys, we're going to continue to work our sources and get some more information. We have a lot more on this coming up right at the top of the hour. We'll be all over this story.

Two days after winning the Republican Senate primary in Kentucky, the darling of the tea party movement, Rand Paul, is coming under some fire. Critics are seizing on remarks he made about the civil rights act of 1964, and his Democratic opponent is accusing Rand Paul of promoting what he calls a narrow and rigid ideology with dangerous consequences. Joining us now is the Republican Senate candidate from Kentucky, Rand Paul. Dr. Paul, thanks very much for coming in.

RAND PAUL, (R) KENTUCKY SENATE CANDIDATE: Good to be with you, Wolf.

BLITZER: I want to give you a chance to explain because there's a lot of confusion right now about precisely where you stand. I'll ask you a simple question. If you had been a member of the Senate or the house back in 1964, would you have voted yea or nay for the civil rights act?

PAUL: Yes, I would have voted yes.

BLITZER: So, why is there all this confusion emerging right now? Give me your analysis, because you had to issue a statement today. There've been interviews on NPR yesterday and MSNBC. Tell us what's going on. PAUL: Well, first of all, Wolf, I thought I was supposed to get a honeymoon. When does my honeymoon start, you know, after my victory?

BLITZER: No such thing in politics, Dr. Paul.

PAUL: No such thing, I think you're right. I think what troubles me is that the news cycle's gotten out of control. I mean, for several hours on a major news network yesterday, they reported repeatedly that I was for repealing the civil rights act. That is not only not true, never been my position, but is an out and out lie. They repeated it all day long. It started with my Democrat opponent asserting this but has never been my position.

BLITZER: You support that -- because the argument was -- the argument was made that you support the civil rights act in terms of federal -- in terms of government responsibilities. There should be no racism or segregation, but if there's a private club or a restaurant where they don't want to serve African-Americans as abhorrent as that is, you think that they have -- you suggested, correct me if I'm wrong, they would have a right to do that?

PAUL: What I did suggest was that it was a stain on the history of the south and our country that you know we desegregated in 1840 in Boston. William Lloyd Garrison was up there with Frederick Douglas being thrown off trains and going through what happened in 1840 in Boston. So, I think it is a stain on our history and something that I am sad for and something that if I had been alive at the time, I would hope that I would have been there marching with Martin Luther King.

One of our biggest county coordinators was there with Martin Luther King, attended the rallies in D.C., and considers himself to be a civil rights activist, and he takes it as a personal insult that people will say that our movement doesn't believe in civil rights.

BLITZER: But I just want to be precise on this, Dr. Paul. I want to be precise, did Woolworth Department Store have a right at their lunch counters to segregate blacks and whites?

PAUL: I think that there was an overriding problem in the south, so big that it did require federal intervention in the 1960s, and it stemmed from things that I said, you know, have been going on really 120 years too long, and the southern states weren't correcting it, and I think there was a need for federal intervention.

BLITZER: All right. So, you clarified you would have voted yea, you would have voted yes, in favor of the 1964 civil rights act.

PAUL: Yes.

BLITZER: Would you also have voted for the Americans with disabilities act?

PAUL: Well, I have some questions about it. I mean, the one question that comes to mind -- to my thinking is, let's say you have a local office and you have a two-story office, and one of your workers is handicapped. Should you not be allowed maybe to offer them an office on the first floor or should you be forced to put in a $100,000 elevator? I think that sounds like common sense that you should be allowed maybe to give them a first floor office. I think, sometimes, when we have a federal solution, we make it one size fits all and that we recognize the problem which I do al of someone who's handicapped, but then, we don't take any consideration at all the business owner or the property owner.

So, I think it's a balancing act and I'd have to look at that legislation to see how they balanced it, but my understanding is that small business owners were often forced to put in elevators, and I think you ought to at least be given a choice can you provide an opportunity without maybe having to pay for an elevator?

BLITZER: So, the answer is you don't know for sure if you would have voted yes or no on that Americans for disabilities act?

PAUL: Yes. I mean, I'd have to look at it and see. I think you do have -- it's a balancing act. And I am in favor of trying to have the workplace open. My office is open to the handicapped. We try very hard, but, you know, it's been open to the handicapped for decades, so, you know, it doesn't always take government for people to do the right thing. Sometimes, government has to step in extraordinary circumstances, but I think a lot of times that the -- the private world can step up and do the right things or we can find local solutions over federal solutions, so it's not always whether you oppose something.

It's about where the solution should arrive, whether it arrives at the federal government or the local government. I do think, though, that there is a big civil rights issue out there. I think the Democrats avoid it, and that's school choice. I think the biggest thing holding down our inner city communities is a lack of good education, and I say give them a choice. Let them choose to go to a school anywhere in the city or outside the city, and so I think school choice is the civil rights issue of our era, and many people are saying that.

BLITZER: I want you to have a chance to differentiate, if you want to differentiate, with your dad. I've interviewed Congressman Ron Paul on many occasions, and we've gone through all of these issues. He's a principled libertarian, as you well know. First of all, are you as principled a libertarian from your perspective as your dad?

PAUL: Some will say not. I call myself a constitutional conservative, which means that I believe that the constitution does restrict and restrain the federal government, and we should be doing a lot less than what we're doing, and if we did so, I think we would balance the budget, and we would have more local and state control.

BLITZER: All right.

PAUL: So, we'll agree on a lot of issues, and we'll disagree on some, and there may be some nuance. But I would say, you know, he will probably still be the number one libertarian in the country. I'm probably not going to supplant him there.

BLITZER: You're not going to be able to compete because there are four votes, and I've discussed this with him, himself, in which the vote was 425-1, 421-1, 424-1, for example, asking Arab states to acknowledge genocide in Darfur, asking Vietnam to release a political prisoner, condemning the Zimbabwe government, awarding a gold medal to Rosa Parks, your dad was the only member on the Democratic and the Republican side to vote against that because he's a principled libertarian. He doesn't want the U.S. government involved in any of these issues. Are you the same as him?

PAUL: Probably not. And the thing is, is that he is incredibly principled, and I admire him for the stands he's taken. Interestingly, some of those things, it sounds like how could anybody be against that? The reason he votes against it a lot of times is not that he disagrees with the position. Often, he'll agree with the position of the resolution, but just think that the government really shouldn't be making a statement on some of these things.

I think it's yet to be seen how I'll vote on resolutions, non- binding resolutions, but I'm probably not going to be the great path breaker that he is. But I think he stands on principle, and I think he's well respected because he doesn't compromise his principles.

BLITZER: We're going to continue this conversation. I'm hoping on many occasions, Dr. Paul. Thanks very much for coming in. Glad you had a chance --

PAUL: Thank you.

BLITZER: To explain your positions precisely. These are, as you well know, as a novice politician, among the most sensitive issues out there.

Tomorrow, by the way, Kentucky's democratic senatorial candidate, Jack Conway, will be our guest here the SITUATION ROOM. We'll go through a lot of these issues and others with him as well.

And we're also getting our first glimpse right now of that massive oil spill gushing into the Gulf of Mexico. These images are live images. Stand by. Is this disaster any closer to ending? I'll ask the EPA administrator, Lisa Jackson.

And what is the suspicious white substance found near Philadelphia's historic liberty bell?

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester's monitoring some of the other top stories in the SITUATION ROOM right now. Lisa, what do you have?

SYLVESTER: Hi there, Wolf.

Well, in Philadelphia, investigators are trying to identify a suspicious white powder found in the building that houses the liberty bell. A guard found the powder inside a balloon. Details, though, are still sketchy. An FBI spokesman said that it is some kind of a biological substance. We're told, though, only a few people came in contact with it. The Liberty Bell Centre and part of a nearby street were evacuated.

And you might think the infamous White House party crashers, remember them, that they would have stayed away from the Obamas' second state dinner? Well, guess again, Michaele and Tariq Salahi were in a limousine that was stopped by a secret service officer just a few blocks from the White House last night. The driver was ticketed after running a red light. The Salahis then went to dinner with friends at a nearby restaurant with cameras and photographers in tow.

And French officials say a single masked intruder made off with millions of dollars worth of artwork from a French museum. Five paintings were stolen from the Paris museum of modern art, including major works by Picasso and Matisse. Officials say the thief got in by cutting a padlock on a gate and breaking into a window. The museum security camera reportedly was turned off, and, wolf, there were three guards on duty, and they said they did not see a thing. Sounds like something out of a movie a little bit.

BLITZER: Sounds like an inside job or something, who knows. All right, thanks very much, Lisa.

We're getting our first live look at the massive oil spill gushing into the Gulf of Mexico, but why don't we know exactly how much oil is coming out? My interview with the EPA administrator, Lisa Jackson that's just ahead.

And I'm also sitting down here in the SITUATION ROOM with the former president of Pakistan, Pervez Musharraf.

(COMMERCIAL BREAK)

BLITZER: Get back to that massive oil spill that's been hammering the Gulf Coast for exactly one month today. There's no apparent end in sight.

And joining us now, the administrator of the Environmental Protection Agency, Lisa Jackson. Thanks very much for joining us. I guess, the basic question is, is this, are we any closer to ending this spill today than we were a month ago?

LISA JACKSON, EPA ADMINISTRATOR: I guess, we're marginally closer, but the truth of the matter, Wolf, is that none of us can rest and all of us are frustrated until we stop the oil that's gushing from the seabed.

BLITZER: Is it possible that the oil and the natural gas are going to continue gushing out until August? JACKSON: Well, we certainly hope not. I mean, BP certainly has at least one of its plans that say they have to drill this relief well, but there are plans for this top kill exercise that I think is still scheduled to start on Sunday. That's the next, I guess, rung on the ladder of trying to end this nightmare once and for all.

BLITZER: Is that the last rung on the ladder before -- before the August, in effect, separate drill that they're working on?

JACKSON: Well, you know, they have been adapting a bit. We're all hoping that this is going to be successful. And they're taking their time trying to do it right. They still have the riser pipe that's inserted. That's working I think still on today. But we're going just to have to keep working this. I mean, you can't give up if it doesn't work. God forbid it doesn't, but if it doesn't, we're going to have to keep pushing them to try other things because we're certainly not going to sit around until and not try other things.

BLITZER: How much confidence do you have in BP?

JACKSON: You know, it's confidence that sort of a trust until verify situation. They have the expertise to have drilled this well. We're expecting them to bring all the resources that they would bear if they were drilling to now stopping this gush of oil and also dealing with the environmental catastrophe that's resulting. Now, they've said they're going to pay for it and said they're going to do it and I got to believe that they understand that there's nothing more important for them to do right now.

BLITZER: Should the federal government take over and just sort of kick BP out of this? Does the federal government have the wherewithal to get the job done?

JACKSON: Listen, no. I don't think it's a matter of wherewithal. I think it's a matter of the federal government is in charge. The federal government directs BP on those things that are really governmental, but we also need BP to get in there and bring their resources to bear. The vehicles they have at the bottom, the work that they're doing, the scientists that they have. We have scientists with them in Houston. The president made it clear that every federal resource, no matter where it comes, from DOE, DOD, EPA, we're all working very hard, but we need BP at the table. No way we should let them away from that table.

BLITZER: And we're not even sure how much oil is gushing out from that hole 5,000 feet below the ocean -- down in the ocean. Sylvia Earl who's a well known oceanographer was quoted as saying this, "it seems baffling that we don't know how much oil is being spilled. It seems baffling that we don't know where the oil is in the water." Can you tell us, Administrator, right now whether we know if it's 5,000 barrels a day, 10,000 barrels a day, 100,000 barrels a day. Do we know?

JACKSON: No, but we're trying to find out. I was on the panel with Dr. Earl. I might, you know, respectfully replace battling with frustrating. It is certainly frustrating when you're operating in 5,000 of water. No one can go down there and put ice on it. And as Commander Allen said, it's like inner space, you know. We're feeling so frustrated because we're looking at all this remotely. We need to melt, we absolutely do.

And the president made it clear that he wants every resource. NOAA has brought to bare (ph) along with outside expertise to try to make an accurate estimate. The only thing I'll tell you is we got to make sure it's accurate because I think the American people keep hearing this number change. They want their federal government to give a number, but we need to take a time to get it right.

BLITZER: So, even you, the administrator of the EPA, you don't know how many barrels a day are spewing out of it?

JACKSON: No, and that's why the president said from day one, we better work on the worst case scenarios. So, when we look at response, we're responding to the fact that we believe that there are larger volumes coming out, and you know, even with the case of how we're responding to the spill, people have talked about these persons that been one of the issues much in the news (ph). One of the reasons I've been so hesitant to take these persons off the table is because we have so few tools to deal with an ongoing -- this is an ongoing release. We're almost at, you know, 3, 3-1/2 weeks of release of oil in the Gulf of Mexico.

BLITZER: It's a month, actually. It's 30 days right now. So, when you say you're looking at the worst case scenario for the amount of barrels coming out a day, what is that worst case scenario?

JACKSON: You know, we've been working -- I think it's 60,000 or 70,000 barrels a day is worst case. You know, don't quote me on the number, but the idea have been that we will be talking about so much crude oil coming up that we'd have to deal with the fact that we have a long-term amount of oil that's going to continue to be a problem in the Gulf. And, you know, that's what's bearing out. We still are hoping for the best.

And, you know, I'm from the Gulf Coast region, and I keep telling people don't, you know, don't bring down people's spirits before we have to. We got to keep being prepared and not let our vigilance down along the coast and in the wetlands, but we also have to -- we owe it to them to be doing everything we can out at sea to stop the leak and deal with it and stop it from coming ashore.

BLITZER: Jack Cafferty's going to be back in just a moment with your e-mail.

And later, what happens now that the jailed American hikers in Iran have been reunited with their mothers? We're going to hear from the hikers themselves for the first time.

(COMMERCIAL BREAK)

BLITZER: Jack's back with "The Cafferty File" -- Jack.

CAFFERTY: The question this hour, Wolf, is does Mexico have a right to complain about Arizona's immigration law?

Mike writes: Wow, you're my new hero, I almost agree with you. Mexico can complain about Arizona's immigration law provided they also explain their immigration policy and explain how they treat illegals coming north across their border from Central America.

Becca says: Mexico has no right to interfere in our country's business. The president of Mexico has insulted the American people, especially those in Arizona, who are fighting for their lives against the drug cartels from Mexico and an invasion of illegals. And to top that off, our own president sides with him against the American people. Our president's allegiance is to his country, no matter what. You don't insult your own people.

Ivan writes from Brazil: In my country, all of us, all of us, are required to carry a proper I.D. at all times. And our police are entitled to check anyone at any given time for his or her I.D. Failure to produce such an I.D. may lead to a free trip to the nearest police precinct from where such person is only allowed to leave after proper identification is established. Driving a car down here without having your driver's license may lead to even worse consequences like having your car impounded and the fine. Mexico is making a fuss about nothing.

Frankie writes: If your family's ever been on the on the other side of a police officer abusing his authority, you'd understand what's wrong with the Arizona law. Felipe Calderon struck me as sincere and gutsy. He made me feel much better about both countries solving our common problems together.

Kat writes from Texas: really? No, he does not. He has a lot of nerve acting like the illegals living here are owed something. They are not. I see his hand was stuck out again asking for more money. Once again, just like the illegals.

And Paul writes: Jack, Jack, Jack, you're starting to sound like a right wing nut. Congratulations. It's about time.

If you want to read more on this, you'll find it on my blog at CNN.com/caffertyfile -- Wolf.

BLITZER: I'm sure we'll find a ton of stuff. All right, Jack, thanks very much. We do every day.

The breaking news we're following here in the SITUATION ROOM right now, the director of national intelligence in the Obama administration is resigning. Admiral Dennis Blair, information about why and events that led up to it, we're getting new information. Stand by for that.

Plus, an emotional reunion. American moms sharing some long- awaited hugs with their kids held captive in Iran. We're hearing from the jailed hikers for the first time.